City car-plate prices: Low bids, high anxiety

THE average price for a car plate in Shanghai, long a bane of city dwellers, on Saturday unexpectedly plunged to a six-year low at the first auction for 2008 under new rules enacted by the municipal government.

But a breakdown in the bidding system, both through the Internet and phone hotlines, is believed to have contributed in part to the price decline and angered many eligible would-be buyers.

The average auction price was 23,370 yuan (US$3,218), only half of the record high of 56,042 yuan in December, according to Shanghai International Commodity Auction Co, organizer of the monthly event.

It was the lowest price since the 24,040 yuan recorded in September, 2002. The bottom winning bid on Saturday nosedived to 8,100 yuan, compared with 50,000 yuan a month earlier.

It was also the third-lowest price since the monthly auction system started in 2000, trailing 100 yuan in December 2002 and 10,800 yuan in May 2004.

Some winners

About 20,539 bidders competed for 16,000 private licenses this month, as the city government moved ahead the February quota due to the Lunar New Year, which falls on February 7.

The city started the new rules this month. They allow more bidding opportunities and open the lowest successful price to the public during the auction process. This helps people make their own decisions rather than rely on dealer advice.

"I never thought the price could drop so much," said a woman named Yuki, who won her bid with 16,900 yuan. "I had planned to offer 45,000 yuan."

Yuki was one of the lucky ones. Many people were blocked from even making a first offer due to the system breakdown.

Another buyer, Sun Xinwei, said the new rules helped prevent prices from being manipulated by dealers. "I managed to revise a bid from the original 30,000 yuan to 8,200 yuan based on the indicative price," Sun said.

Zhu Junyi, director of an auto research department under the Shanghai Economic Committee's Information Center, said about 10,000 eligible people failed to make bids due to crowded traffic on both the Internet and the hotlines.

Many said they could not log into the online bidding system nor access the hotlines from the first round of bidding at 10am.

Others said they were not able to change their price in the second round of bidding due to line hold-ups.

"The municipal government had an emergency meeting after receiving many bidders' complaints," Zhu said.

While many bidders hailed the new rules that controlled soaring prices, Zhu warned that the average price could still rise in following months.

"This month's price is not likely to be the benchmark for the whole year due to the system problems," Zhu said. "Many bidders still offered 30,000 yuan and up to 50,000 yuan."

The much-anticipated next auction will be held in March on a date to be announced.